The Week Ahead: 20-24 March

The US economy is healthy and unemployment is falling according to Janet Yellen, thus, the central bank is expected to increase the rates at least twice more this year

Last week was eventful to say the least with the British Pound enjoying strong appreciation across the board and the US Dollar experiencing its worst day in two months. Across the Pond the Federal reserve chose to raise rates for the second time in three months sticking to their outlook of two further this year. Janet Yellen followed the decision with a less than upbeat speech stating no plans of speeding up the pace on monetary tightening. The Dollar subsequently fell to more than two week lows against its peers boosting Cable to fresh multi week highs.

Sterling was supported by a split decision by Bank of England MPC members regarding the UK’s interest rate decision. Despite keeping rates on hold as expected Kirsten Forbes had a change of view voting to raise rates in the near future. Chatter soon followed that other members may not be far from changing their own opinions. This gave the Pound further support resulting in strong prices across the board.

The Euro depreciated last week amid fresh political concerns seeing far-right anti-EU leader Marine Le Pen widening her lead over opponent Emmanuel Macron in the first round of France’s presidential elections.

Looking ahead at this week Indigo FX has selected the main economic events most likely to move exchange rates.